Toys R Us files for bankruptcy, annouces plan for stores

The mostly empty shelves of a Toys

Toys " R " Us, which has about 32 stores in New Jersey and more than 1,600 stores worldwide, says its stores will remain open and will continue operating as usual.

According to multiple published reports, including by the Wall Street Journal, the iconic toy giant is expected to file for bankruptcy - and soon.

"Today marks the dawn of a new area at Toys "R" Us where we expect that the financial constraints that have held us back will be addressed in a lasting and effective way", he said.

In the latest sign of distress that has ripped through traditional brick-and-mortar retailers, sources said late on Friday that Toys "R" Us was working to put together a loan to fund its operations in a potential Chapter 11 filing.

Today, while still operating over 800 individual stores in the USA and almost as many internationally, Toys "R" Us is no longer the leading retailer for toy and juvenile products it once was.

The company's operations outside the U.S. and Canada include about 255 licensed stores and joint partnerships in Asia, which are separate entities.

E-commerce expert David Jinks, from delivery firm ParcelHero, said: "Toys R Us same-store sales have fallen for three consecutive quarters, and its most recent results were down 4.1 per cent".

Toys "R" Us, which was supposed to enter India this month, is yet to open its stores. However, the company closed its iconic NY store on Fifth avenue because of high costs.

The move comes at a critical time ahead of the peak holiday shopping season that is crucial to retailers' bottom lines.

Various lenders including JPMorgan have already committed as much as $3bn already to financing the attempted company turn around.

The financial restructuring, Toys R Us hopes, will allow the company to alleviate its debt and continue to operate.

More than a dozen retail bankruptcies have been reported this year, but none of the retailers are in the Toys "R" Us league.

What is Chapter 11 and is Toys R Us going to close down?

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